Download pom session-7,8

POM SESSION-7,8
PRODUCT LIFE CYCLE
ECE AND EEE
PRODUCT
• It is anything that can be offered in the market
for attention, acquisition, use or consumption.
• It helps in satisfying a need or a demand
Why a product life cycle?
A company’s positioning and differentiation
strategy must change as the product, market, and
competitors change over the product life cycle(PLC)
Product life cycle states four things:
• Products have a limited life.
• Products sales pass through distinct stages,
each posing different challenges,
opportunities and problems to the seller.
• Profits rise and fall at different stages of the
product life cycle.
• Products require different marketing,
financial, manufacturing, purchasing, and
human resource strategies in each life – cycle
stages.
4 Stages of Product Life Cycle
• Introduction
• Growth
• Maturity
• Decline
Introduction Stage of the PLC
Sales
Low
Costs
High cost per customer
Profits
Negative
Marketing Objectives
Create product awareness and trial
Product
Offer a basic product
Price
Use cost-plus formula
Distribution
Build selective distribution
Promotion
Heavy to entice product trial
Growth Stage of the PLC
Sales
Rapidly rising
Costs
Average cost per customer
Profits
Rising
Marketing Objectives
Maximize market share
Product
Offer extension, service, warranty
Price
Penetration strategy
Distribution
Build intensive distribution
Promotion
Reduce to take advantage of demand
Maturity Stage of the PLC
Sales
Peak
Costs
Low cost per customer
Profits
High
Marketing Objectives
Maximize profits while defending market share
Product
Diversify brand and models
Price
Match or best competitors
Distribution
Build more intensive distribution
Promotion
Increase to encourage brand switching
Decline Stage of the PLC
Sales
Declining
Costs
Low cost per customer
Profits
Declining
Marketing Objectives
Reduce expenditures and milk the brand
Product
Phase out weak items
Price
Cut price
Distribution
Selective: phase out unprofitable outlets
Promotion
Reduce to minimum level